Europe risks losing a generation to the debt and banking crisis

City A.M. Reporter
EUROPE’S rescue of its troubled banking sector may have lost an entire generation of young people in the process, the head of the European Parliament said yesterday.

“We saved the banks but are running the risk of losing a generation,” said Martin Schulz, a German socialist who has led the European parliament, the EU’s only directly elected institution, since January last year.

“One of the biggest threats to the European Union is that people entirely lose their confidence in the capacity of the EU to solve their problems. And if the younger generation is losing trust, then in my eyes the European Union is in real danger,” he told Reuters in an interview.

Since the region’s debt crisis erupted in Greece in late 2009, the European Union has created complex rescue mechanisms to prop up distressed countries and their banking sectors, setting aside a total of €700bn.

But little has been done to tackle the devastating social impact of the crisis, with more than 26m people unemployed across the EU.

That crippling level of unemployment has led to protests and outbreaks of violence across southern Europe, raising the threat of full-scale social breakdown, including rising crime and anti-immigrant attacks that can further rattle unstable governments.

European Union heads of state and government will discuss the fallout from the debt crisis at a summit this Thursday and Friday.